Mortgage applications to purchase a home and for refinancing barely budged last week, the Mortgage Bankers Association reported Wednesday. Economists are blaming the stall in loan demand on rising interest rates and rising home prices.
Total mortgage application for refinances and home purchases decreased 0.4 percent last week compared to the previous week on a seasonally adjusted basis, the MBA reported. Volume is now 24 percent lower than a year ago. Interest rates are also significantly higher than a year ago too.
The higher interest rates are prompting fewer homeowners to have incentive to refinance. Refinance applications have now plunged 40 percent compared to a year ago.
Mortgage applications to purchase a home did manage to move 1 percent higher for the week. They are nearly 5 percent higher than a year ago. However, home sales have been weakening for five of the past six months. Economists blame the shortage of homes for sale and higher prices for hampering buyer interest.
The MBA reports the average 30-year fixed-rate mortgage rose to 4.12 percent last week, up from 4.11 percent the week prior.
“Rates moved higher over the course of last week, at least partially due to signs of stronger economic growth,” says Joel Kan, an MBA economist. “Four of the five mortgage rates that we track increased.”
Source: “Weekly Mortgage Applications Stall Along with Rates and Home Sales,” CNBC (Oct. 4, 2017)
